Hyponeros - 11:05 am on Aug 11, 2011 (gmt 0)
There are clearly two things for you to do:
1- Start bidding on your own domain and trademark. Make sure you optimize your ads as much as possible, by adding all 10 available site links, your address from google place (if relevant), etc... and specifying that you are the officila site. Bid high enough to make sure you are at position 1. Your QS should not be lower than 9 (it will surely be 10), which should make your keyword cheap and probably more expensive for your competitor.
2- Start bidding on your competitor name. Be smarter than him and don't lie or cheat. This means, don't try to confuse the user by making him believe that your site is the one of your competitor but make clear that you are an alternative to your competitor. In that case I suggest to target not higher than position 2.